Drug giant Johnson & Johnson (J&J) continues to make news with a Justice Department investigation into accusations of Medicaid Fraud, announced Business Week. The Justice Department recently settled with Omnicare over kickback allegations to the tune of $112 million.

The massive settlement concerned kickbacks involving the United States’ biggest nursing home pharmacy, Omnicare and generic drug maker IVAX Pharmaceuticals and is just a part of a larger probe into potential Medicaid fraud by Big Pharma, said Business Week. Some feel the investigation focuses on industry paying consumer drug providers for special treatment, according to Business Week. The profits are believed to compromise patient care and increase costs. (more…)

An iPhone class action lawsuit has been filed in Alabama by a consumer who claims Apple Inc. and AT&T Mobility LLC misrepresented the iPhone’s multimedia messaging service (MMS) capabilities. MMS capability is key for sending text messages accompanied by a photo, video or other form of media.

The complaint, which was filed in U.S. District Court for the Southern District of Alabama, alleges Apple and AT&T representatives have continually misrepresented, concealed, suppressed or omitted material facts to customers in their stores about the MMS functionality for the 3G and 3G-S iPhones. (more…)

Tax cheats beware! It looks like a 2006 law that increased monetary rewards for Federal tax whistleblowers is working. According to an Internal Revenue Service (IRS) report detailed by The New York Times, tips about suspected tax cheats owing at least $2 million have jumped more than tenfold.

According to the IRS Web site, its Whistleblower Office pays money to people who blow the whistle on persons who fail to pay the tax that they owe. If the IRS uses information provided by the whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts. Prior to 2006, whistleblower rewards were the sole discretion of the IRS, and could not exceed 15 percent of the money recovered. (more…)

Atlanta-based Beazer Homes USA Inc. has agreed to pay up to $53 million to the government and homeowners to settle mortgage fraud allegations, reported Bloomberg.com, citing the Justice Department.

It seems Beazer’s mortgage unit inappropriately had buyers pay discount points and did not reduce interest rates when processing federally insured loans, said the Justice Department, according to Bloomberg.com. The Justice Department also stated that Beazer allegedly gave cash gifts to potential homebuyers that were funneled through charities and which better enabled those buyers to meet down payment requirements while also neglecting income requirements, reported Bloomberg.com. (more…)

The U.S. Food and Drug Administration (FDA) has released a warning to the public about bogus flu products that are targeting consumers via Websites and other promotional devices. The FDA and the Federal Trade Commission (FTC) issued the alert to consumers to be wary of Internet sites and other promotions for products that claim to diagnose, prevent, mitigate, treat or cure the 2009 H1N1 influenza virus (swine flu). Both agencies also advise operators of such Websites to take prompt action to correct and/or remove promotions of these fraudulent products or face enforcement action.

“Consumers who purchase products to treat the novel 2009 H1N1 virus that are not approved, cleared or authorized by the FDA for the treatment or prevention of influenza risk their health and the health of their families,” said Michael Chappell, acting FDA Associate Commissioner for Regulatory Affairs. “In conjunction with the Federal Trade Commission, the FDA has developed an aggressive strategy to identify, investigate, and take regulatory or criminal action against individuals or businesses that wrongfully promote purported 2009 H1N1 influenza products in an attempt to take advantage of the current flu public health emergency.” (more…)

Aetna and CIGNA have been named in a lawsuit filed by the American Medical Association (AMA) over health insurance reimbursement payments.  According to the AMA, the lawsuit charges that Aetna and CIGNA used a flawed database to pay physicians artificially low rates for out-of-network care.

The database in question is operated by Ingenix Corp., a wholly-owned subsidiary of UnitedHealth Group.  The database used “usual and customary” rates  to calculate reimbursements for out-of-network care.  The AMA lawsuit seeks damages for physicians from each company commensurate with what doctors would have been paid if the out-of-network pay rates had been calculated accurately. Damages are also being sought for patients who overpaid, the AMA said. (more…)

Wellpoint and Cigna, two of the country’s largest insurers, have as agreed to stop using the much-maligned Ingenix database for determining reimbursements for customers who seek out-of-network care.  Wellpoint and Cigna are just the latest insurers to reach an agreement with New York Attorney General over Ingenix.

The Ingenix database, owned by UnitedHealth Group, is used by many insurers to  determine their “usual and customary” rates for out-of-network care.  Last year, the New York Attorney General’s office began an investigation into allegations the Ingenix database intentionally skewed “usual and customary” rates downward through faulty data collection, poor pooling procedures, and the lack of audits. (more…)

Two Buffalo, New York insurers have reached an agreement with the state’s Attorney General to stop using Ingenix, the reimbursement database owned by UnitedHealth Group.   Independent Health and HealthNow New York Inc. are just the latest insurers to agree to end their use of a database the Attorney General’s called “a defective system” to calculate reimbursement rates for patients who go out-of-network.

Independent Health, HealthNow, and many other insurers have used the th United-owned Ingenix database to determine their “usual and customary” rates for out-of-network care.  The Ingenix database uses the insurers’ billing information to calculate “usual and customary” rates for individual claims by assessing how much the same, or similar, medical services would typically cost, generally taking into account the type of service and geographical location.  Under this system, insurers control reimbursement rates that are supposed to fairly reflect the market. (more…)

Cigna and Aetna  are the latest insurers to be hit with a lawsuit over the Ingenix database, which is used by many large health insurers to determine reimbursement rates.  The lawsuits, filed by the American Medical Association (AMA) and several state associations, claims that the Ingenix database was rigged to underpay doctors on out-of-network claims for more than a decade.

Ingenix is a subsidiary of UnitedHealth Group.  The Ingenix database uses the insurers’ billing information to calculate “usual and customary” rates for individual claims by assessing how much the same, or similar, medical services would typically cost, generally taking into account the type of service and geographical location.  Under this system, insurers control reimbursement rates that are supposed to fairly reflect the market. (more…)

Banco Santander is in the middle of a class action lawsuit over the growing Madoff scandal in which investors were swindled out of millions of dollars.  Bloomberg News is reporting that the lawsuit alleges that Banco Santander and others did not conduct sufficient due diligence to prevent losses in funds that invested money with Madoff.  Banco Santander SA is Spain’s largest bank.

Bernard Madoff’s Ponzi scheme has claimed victims worldwide and, now, investors in Spain are taking steps to recoup their money.  In addition to the class-action suit, over 100 Spanish investors are scheduled for talks with both Barclays Bank and Banco Santander, said the Times Online yesterday, in a bid to recover cash.  Fifty other investors are also involved in another action there. (more…)